MGM set to refinance in sign of health

In a sign of renewed confidence in MGM, a number of banks have signed on to the Lion's plan to refinance the $500 million of debt it took on after emerging from bankruptcy in 2010. JP Morgan is acting as the lead bank in the transaction, which has already received about $500 million in commitments from several lenders, according to multiple sources with knowledge of the deal. Transaction will convert the current debt -- which consists of a $175 million revolving credit facility and a $325 term loan -- entirely into a revolving credit facility, sheltering the Lion from costs on money it's not using. Refinancing has been out to a small group of potential lenders for the past few weeks. Observers say that given the current market interest, more lenders are likely to subscribe to the final deal than originally intended. Between 10 and 15 banks are expected to take part in the syndicate. Final bank commitments are due at the end of this week. Deal is expected to close by the beginning of next week, at the latest. Refinancing is more notable for what it means than the transaction itself: Lender interest in the Lion so far -- and the likelihood of the deal getting oversubscribed -- is a sign that Wall Street likes what it's seen from MGM during the past year. That includes distribution deals (like the Lion's renewed homevid pact with 20th Century Fox and a deal with Sony to distribute the next two "Bond" sequels), lowered overhead and franchise pics "The Hobbit: An Unexpected Journey" and "Skyfall" currently in the works. Financial observers say that the current refinancing is not surprising, given that many Hollywood companies are looking to take advantage of better rates in a loosening credit market. MGM's appeal is reaching a broader audience than the restructuring from two years ago, when many lenders were uncomfortable banking on a company so soon after a bankruptcy. But the refinancing effort shows the financial market is responding to the Lion's undertakings, including a boosted international television operation under toppers Gary Barber and Roger Birnbaum. On Friday, ratings agency Moody's Investors Service upgraded MGM's debt rating, likely boosting the Lion's appeal to potential lenders. MGM completed its restructuring at the end of 2010, which helped the lion wipe off nearly $5 billion in debt from its books. News of MGM's current refinancing effort comes just one week after an executive at Kirk Kerkorian's investment vehicle, Tracinda Corp., told the Wall Street Journal that the former MGM owner was on the hunt to acquire a movie studio, production company or other entertainment business. MGM declined to comment. JP Morgan has a policy of not commenting on deals before their official announcement. Contact Rachel Abrams at Rachel.Abrams@variety.com